Ontario to Reduce Cost of Natural Gas

Backgrounder

Ontario to Reduce Cost of Natural Gas

Ontario Premier Doug Ford today announced the removal of the carbon tax from natural gas bills in Ontario. Removing the carbon tax from the cost of natural gas for all consumers is part of the government's promise to lower energy costs for Ontarians.

Removing the Carbon Tax from Natural Gas Pricing

The Province revoked the cap-and-trade carbon tax regulation and prohibited all trading of emission allowances effective July 3, 2018.

Bill 4, The Cap and Trade Cancellation Act 2018, which aims to repeal the carbon tax, was introduced into the legislature on July 25, 2018.

Removing the carbon tax means a reduction of approximately 3.3 cents per cubic metre on the price of natural gas for Ontario consumers.

As of October 1, 2018, natural gas bills will no longer include the carbon tax. Any overcharges for the cap-and-trade carbon tax will be refunded to customers.

Ontario families will save about $80 a year.

Small businesses can expect to save about $285 a year.

The Ontario Energy Board is expected to provide direction to natural gas utilities no later than August 31, 2018, instructing utilities to file new customer rates with the carbon tax charges removed.

Increased Transparency

Effective July 3, 2018, the government filed Ontario Regulation 386/18, Prohibition Against the Purchase, Sale and Other Dealings with Emission Allowances and Credits (Revocation Regulation). The Revocation Regulation, made under TheClimate Change Mitigation and Low-Carbon Economy Act, states that "... no registered participant shall, on and after the day this Regulation comes into force, purchase, sell, trade or otherwise deal with emission allowances and credit."

On July 6, 2018, the Ontario Energy Board issued a Procedural Order instructing utilities to provide written confirmation that they have ceased cap-and-trade activities in line with Regulation 386/18. The utilities complied by July 13, 2018.